OPEC lowers global oil demand forecasts for 2012

Economic growth is mostly set to come from emerging markets, but these countries are reliant on exports to developed economies, which have performed sluggishly this year. Moreover, improvements in the global economy are dependent on the success of government and central-bank action.

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By SARAH KENT

A report published by OPEC
on Wednesday painted a gloomy picture of the world's
economy, as the group of oil producers lowered its forecast for
global oil demand growth this year and warned of a continued
slowdown in 2013.

In its monthly oil market report, the
Organization of Petroleum Exporting Countries said it saw oil
demand growth falling to 800,000 bpd this year, 100,000 bpd
lower than its previous projections. Overall world oil
demand is pegged at 88.81 million bpd this year.

The group of oil producers kept its forecast
for next year's demand growth unchanged at 800,000 bpd, but
warned that "considerable uncertainties' could knock as much as
20% off that figure.

Economic growth is mostly set to come from
emerging markets, but these countries are reliant on exports to
developed economies, which have performed sluggishly this year.
Moreover, improvements in the global economy are dependent on
the success of government and central-bank action.

"Risks to the forecast for 2013 are primarily
on the downside, due to the turbulence in the world economy,"
it said.

Given the increasingly dismal economic
picture, the group of oil producers said it expected supply to
remain comfortable in the coming year, as increases in output
from non-OPEC members outpaced demand growth.

The market "will be characterized by high
volumes of crude supply and increasing production capacity," in
the coming year, the report said.

The report showed that OPEC production
remained high last month, even as oil prices climbed to their
highest level since May.

The group's output fell nearly 265,000 bpd in
September compared to August due to declines in production in
Angola and Nigeria, but still remained above 31 million bpd,
data from secondary sources showed.

Saudi Arabia's oil minister said Tuesday that
the country would continue to pump about 10 million bpd of oil
this month and would like to see oil prices fall to about
$100/bbl.

The data from secondary sources showed Saudi
output rose to 9.85 million bpd in September from 9.81 million
bpd in August.

The data also showed Iranian output was steady
in September, at 2.72 million bpd, following months of declines
the country's production as strict sanctions designed to deter
the Islamic Republic from pursuing its nuclear program hit its
oil industry.

Dow Jones Newswires

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The high price of crude oil and continued political and social uncertainties in and around the world is hampering economic recovery. This in turn resticting the increasing oil consumption. The world leaders have to act wisely as well as actively to improve the situation.